Money Question: How Do You Handle Financial Disagreements?

In the absence of proper financial communication between family members (or in the presence of different financial habits), some sort of friction is natural. Different people will handle such disagreements in different ways. For example, here is a story that Trent @ The Simple Dollar shared at this forum a few days ago:

Apparently, reading The Simple Dollar convinced some guy to have a major financial talk with his wife and it came out that she was hiding five figures in credit card debt. The wife was the one that actually wrote me and she was rather… perturbed. She claims I have destroyed her marriage.

Hmm…plenty of lessons there about financial-communication gap, and reaction to financial trouble. You probably don’t want to end up in such a situation.

So, to evoke some answers on how people handle financial disagreements, let’s ask the following question:

How do you (or how would you) handle financial disagreements (and/or disconnects) between you and your spouse (or partner)?

Responses from six of my fellow bloggers, with their personal stories, have been documented below. I have divided the responses into three interesting categories (click on them to jump there directly, or just scroll to read everything):

If you read the responses carefully and patiently, you will notice a subtle difference between their approaches. If you are shrewd enough, you could probably guess who has been married the longest.

I believe one of the smartest things my fiancee and I have done as a couple is to not combine our finances - (we won’t when we are married either.) The idea came about largely out of laziness. It’s easier to keep the status quo than it is to change things. We split expenses a lot like how roommates would split expenses, but we pro-rate the expenses based on income. If I bring in 90% of the income, I’ll pay 90% of the expenses. This works because we are roughly close in the income territory - she brings in 57% of the after-tax income and I bring in 43% of the after-tax income. This may seem a little self-serving on my part, but we moved across the country for her job promotion, so this is the agreement that we made.

Responses From the Already Married

I’ll be honest here, but my spouse and I are not very good communicators, and it is indeed true that the cause of many a disagreement that we have is based on finances. Normally, we are perfectly fine, happy, agreeable people who get along quite well, but on occasion we butt heads. And it’s usually because we find ourselves in a situation where we don’t communicate well enough. But what is good is that our arguments are usually based on petty matters, and that is because we are very similar in our financial views and philosophies, which helps us deal with money well given the bigger picture.

So how do we tackle disagreements?

#1 We allow ourselves time to work out our emotions.

#2 After a period of time, we try to set the emotion aside and look at each other’s points of view.

#3 We then recognize how silly we are becoming and we then work to improve our communication.

#4 We give the floor to each other to see if we can be swayed by each others’ arguments.

#5 If persuasion fails, we attempt to compromise.

Typically we end the financial discussion at the fourth step, where both us decide that one of us “wins” or at the fifth step, after we get tired of the matter altogether. We find that our debates are often really just power struggles in disguise, so after a cycle that begins with heated and high emotion, we ultimately work hard to draw common sense into the process.

One final note: in order to keep peace in our household, we have decided that each of us has specific roles and responsibilities to do with running the household. And for the most part, because of my interest in the subject, I have been designated the “Chief Household Financial Officer” in charge of most financial operations. In this way, most of our conflicts are limited to a small subset of matters, such as financial decision-making that come up on occasion in our lives. This goes to show that establishing some boundaries over control can help a couple live together harmoniously.

My wife and I handle financial disagreements by just talking them through. We’re fortunate to have both been raised by money wise parents so both of us are uncomfortable wasting money. Unlike me, she does have expensive taste. Whenever she picks out the item she likes most, it almost always turns out to have the highest price tag. However, she is very sensible about acting on her expensive taste. She spends months shopping around for quality items at a good deal.

We kind of work on the honor system in terms of spending. If there is something we want that seems to cost too much we’ll bring it up. After some discussion the decision is usually go for it. This works because it doesn’t happen very often, although I must say she is typically the one looking to spend the money. I don’t like to spend money at all, probably to a fault. She is a good balance for me, helps me live a little

Between my wife and me, we share everything: we have one joint checking account and we are co-owners of all of savings and investment accounts. We really don’t have a lot of disagreements on financial issues. It’s not that she agrees with me on everything from the investment choice I made to the credit card I applied. She just has no interest in the day-to-day management of the money. If there’s any difference, then mostly it’s on what to buy or not to buy, since I am usually the one that initiate the conversation. When I tell her that I want to buy something, she would pause then ask me “Do you think we need it?”

After I tell her why I think we need it, she will give me her reason why she feels differently and at the end, she will say “If you think we need it, then buy it.”

If she sounds hesitant, it usually means she has reservations and that makes me think again whether the purchase is really necessary and many times, if the item isn’t urgently needed, the purchase will be put off.

I won’t call this “30-day waiting period” or anything like that, but it has worked very well for us. Neither of us insists on “I have to have this” and we always consult each other before making big purchase and, at the same time, we also try to be supportive in the “If you like it, then buy it” way so it won’t become an issue between us. With this approach, we are able to avoid any serious dispute on purchase decisions.

General Advice For Everyone

It isn’t very common for two individuals to have identical backgrounds and attitudes about money. Because of these differences it can be easy to disagree about how money is being spent or saved. Take a look at your specific situation and determine where your arguments stem.

If you find your fighting comes from spending habits, it is very important to be able to discuss this openly. For example, you may enjoy golfing every weekend with your friends while your spouse would rather try to apply extra money towards debt or savings. This is can be an ongoing argument. Maybe you want to save up some money to update your kitchen while your spouse would rather just take out a line of credit to pay for the job. Whatever the differences are they don’t go away on their own. It takes open and honest discussion to figure out where each person stands and find a common ground.

Assign Responsibilities

One of the biggest triggers for financial arguments come from a lack of clearly defined responsibilities. Who is responsible for making the mortgage payment, the cable, or the electricity payments? It is common to assume that one person or the other will be making that payment but what happens when it doesn’t get made?

I’ve been there and even a simple thing like a $15 sewer bill can lead to an unnecessary argument. It is important to take the time to define who is responsible for what and stick to this process. When bills simply come in the mail and pile up on the counter it can be easy to fight about who was supposed to pay what and when. By defining responsibilities up front you can reduce the chance of an argument over simple miscommunication.

Try to Reach a Common Ground

It doesn’t matter if the disagreements stem from different money attitudes such as being frugal vs. a lavish spender or if they come from dishonesty, as a couple you need to reach a common ground. Try to understand where each person is coming from and meet in the middle. Clearly this is easier said than done, but the key is open communication.

Now, here is some bonus advice. Long time back, another blogger friend, NCN, wrote these wise words on one of his posts:

Donâ€™t argue with your spouse about money. Itâ€™s just not worth it.

That says much.

To wrap this up, always remember that financial issues must be handled on time, and in a proper manner, before they spill into becoming relationship issues. Once they become relationship issues, words like “destroyed marriage”, etc. start raising their heads and then suddenly there is a lot more at stake than just the money.

Feel free to contribute your own methods (either successful or unsuccessful) of dealing with financial disagreements.

My wife and I argue about money could very easily argue about money all the time. We both work in the industry, and have very different philosophies about saving, budgets, and spending. When we were considering getting married, we were able to foresee this problem, so we established rules for any conflict on money.

The specific rules aren’t as important as the timing of us setting up the rules. Having the conversation when there was no issue allowed us to rationally agree on what we would do in the case of differences of opinion. Now, if there is an issue, we go back to the rules, and voila! No more conflict.

Being married, I once tried the separate money stuff. “You handle your expenses I will handle mine” Of course that did not worked if I was short I found myself asking him for money as if I were a kid, vice versa. We later squashed that.

We pay all expenses. We have two joint accounts one for Household bills and one for misc. items: Food, gas, entertainment.

Usually, my wife and I handle finances pretty well. It’s gotten a bit trickier with investments though. For instance, I started researching investments back in February. Since then, I’ve learned quite a lot, including the fact that load based mutual funds are a pretty bad idea. I’ve tried to explain the concept of index funds to her, but she doesn’t seem to trust me (especially since the money in her IRA was given to her by her father!).

Then when I offer to explain it, she doesn’t trust any of the information I’ve read. So I decided to let it be in the meantime, and just make sure to be smarted about any future investments.

My husband and I rarely fight about money. I think it helps that we have very different skills, so we each have our ‘job’ to do. For example, I’m typically the one who records all our expenses and pays all our bills. He is the grocery shopping guru, with a good memory for sale prices and a solid knowledge of what is - and isn’t - a deal.

While not all our accounts are in both our names, we treat everything as shared. We regularly talk about our financial goals, and the progress we’re making moving towards them, and we’re very forgiving of each other’s mistakes, past and present. At the same time, having clear shared goals and total financial transparency has helped keep us on track.

My husband and I sit down every now and then to determine some of the bigger goals and how much each of us will contribute to it. Some time long back in a similar conversation, we had decided who would be responsible for which bills. Now, for most day-to-day decisions, we make independent decisions and do not question each other about their choice of what/how much to spend. When unplanned expenses come up, we kinda volunteer in turns. What works for us is to have the indepencence to make our decisions, while we both acknowlege and agree that it is after all a common money pool.

My husband and I rarely fight about money, but I’m not sure there’s a magic key to that, except that he’s easygoing by nature and I do most of the organizing. Our money arguments usually consist of me razzing him for not recording his expenses in the checkbook by the time I get around to balancing it or doing the budget. But online bank accounts have helped this - I can now look every so often and see where and how much money was spent and record it myself. I’m happy to do it, since I’m the more skilled person at organizational tasks (he’s better at taking care of the yard : ). Strangely, I’m the natural spender, so whenever I feel the need to buy something unnecessary, he gently reels me in. Maybe the key is a couple who balance each other…

Also, I’d just like to add that I feel it’s VERY important for a married couple to share bank accounts. We’re working toward common goals, both in marriage and money, so it’s important to be on the same page, not living as single people. You still can retain your financial independence, read: buy what you wanna buy when you wanna buy it without having to run it by your spouse, if each of you gets a monthly, equal “allowance” to be agreed upon by both people. I think it’s unfair and creates a potentially destructive power struggle when one spouse feels since they earn more, they should get more to spend. Once we’re married, it’s OUR money. (And yes, I’m married to a wonderful man who works super hard, earns more than me and is working on a Master’s degree - all so WE can have a good life, not so HE can selfishly go do what he wants with the money. Now that’s a keeper)

I would like to point out that time is just as important as money.
I crunch my time really hard trying to make extra money to make ends meet and my husband wastes time like nobody’s business but wants to keep my nose to some insane budget of his own devising. For me, if I work harder and am more conscientious about ensuring money comes in when we need it, and he depends on me doing that but steals more down time for himself than I allow myself, I don’t want him telling me to pinch pennies even tighter than I already do. TIME IS MONEY.

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